Madras High Court
S. Ranganathan vs Kavari Ammal And Ors. on 23 March, 1987
Equivalent citations: (1987)2MLJ152
JUDGMENT S.A. Kader, J.
1. This appeal is against the judgment and decree of the court of the Subordinate Judge of Salem in O.S. No. 293 of 1975. The unsuccessful plaintiff is the appellant.
2. This is a suit on two promissory notes. The case of the plaintiff briefly is as follows : One Selvaral was employed under the plaintiff in his proprietary concern Lakshmi Paper Industries. The said Selvaraj died in an air crash and the defendants are his heirs and legal representatives. The first defendant is the mother, 2nd defendant is his wife and defendants 3 and 4 are his children. According to the plaintiff, the said Selvaraj constructed a house and for the said purpose he overdrew large sums of money from the partnership firm Interpack Industries of which he was one of the partners. As other partners insisted upon the repayment, the said Selvaraj borrowed a sum of Rs. 5,000 from the plaintiff on 30.5.1972 and executed a promissory note therefor promising to repay the principal with interest thereon at 18% per annum. On the same day he borrowed another sum of Rs. 20,000 and executed another promissory note promising to repay the amount with interest at 18% per annum. Both the amounts were borrowed to reimburse the amount drawn in excess from Inter-pack Industries. It is the further case of the plaintiff that the said Selvaraj paid Rs. 1,000 on 25.8.1972 which was appropriated towards promissory note for Rs. 5,000 and another sum of Rs. 1,000 on 25.10,72 which was appropriated towards the promissory note for Rs. 20,000. The said Selvaraj did not pay any further sum to the plaintiff and he died in an air crash leaving behind him the defendants as his heirs. Hence the suit to recover the money from the assets of late Selvaraj in the hands of the defendants.
3. The claim is resisted by the defendants. It is denied that the said Selvaraj overdrew any sum from Interpack Industries or borrowed from the plaintiff Rs. 5,000 and Rs. 20,000 on 30.5.1972 and executed the suit promissory notes. It is also denied that the said Selvaraj paid Rs. 1,000 on 25.8.72 and another sum of Rs. 1,000 on 25.10.72. It was further contended by the second defendant that Selvaraj did. not construct a house during his lifetime. It is the second defendant who purchased the house site in A.V.K. Nagar and constructed a house in the plot purchased by her with her own funds. The defendants emphatically denied the signatures of Selvaraj in the suit promissory notes and the passing of, consideration therefor. It was also pointed out that the plaintiff has changed his case put forward in the notice and took up a different stand in the rejoinder. The first notice did not make any mention to the overdrawing by Selvaraj from Interpack Industries or the borrowings from the plaintiff to reimburse the amount. It is only in the rejoinder, the plaintiff has come forward with such a case. The defendants also denied that Selvaraj left any property. They also claimed the benefits of Act IV of 1938.
4. The plaintiff has filed a reply statement, alleging that the second defendant had no money to construct any house and it was late Selvaraj who has put up the house. On the above pleadings, the following issues were framed for trial:
1. Whether the suit promissory notes, dated 30.5.1972 are executed by the deceased Selvaraj?
2. Whether the suit promissory notes dated 30.5.1972 are true, valid and binding on the defendant?
3. Whether the suit promissory notes are supported by consideration?
4. Whether defendants are entitled to the benefits of Act IV 38/72 and Ordinance 8/75?
5. Learned Subordinate Judge found on issues 1 to 3 that the suit promissory notes were not true and were not supported by consideration. As no arguments were advanced under Issue No. 4 regarding the benefits of Act IV of 1938, the court below did not give and finding thereon. Learned Subordinate Judge suo motu took up the question of limitation and found that the suit was barred by time as it has been filed on 16.6.1975 more than three years after the execution of promissory notes on 30.5.1972. Aggrieved by the dismissal of the suit, the plaintiff has come in appeal.
6. Two points which arise for consideration are:
(1) Whether the suit is barred by time? and (2) Whether the suit promissory notes under Exs. A1 and A2 are true and supported by Consideration?
7. Point No. 1 : The suit promissory notes are dated 30.5.1972 and the suit has been filed on 16.6.1975, more than three years thereafter. The last date for filing the suit is 30.5.1975. It is seen from the High Court Calendar that the Courts were closed at that time for summer vacation and reopened only on 16.6.1975. The suit has therefore been filed on the reopening day and is not therefore, barred by time. Unfortunately this fact has not been stated in the plaint and hence the conclusion of the court below is that the suit is barred by time. The point is found in favour of the Appellant.
8. Point No. 2 : Ex. A1 the suit promissory note is purported to have been executed by late Selvaraj on 30.5.1972 for Rs. 5,000- in favour of the plaintiff. Ex. A2 is another promissory note purported to have been executed by the deceased Selvaraj on the same day for Rs. 20,000 in favour of the plaintiff. Late Selvaraj died on 31.5.1973 in an air crash and the defendants are his heirs and legal representatives. It is not in dispute that the plaintiff has not made any claim on Selvaraj during his lifetime and it is only in the month of April, 1975 the claim has been made against the defendants by means of a notice under Ex. A3. The suit has been laid against the heirs of the promissor and in such a case, the burden is on the plaintiff to establish beyond doubt the execution of the promissory notes and the passing of consideration. As pointed out by the Bench of this Court in Anumolu Narayana Rao v. Ghattaraju Venkatappayya and Ors. (1937) 1 M.L.J. 543 : 44 L.W. 784 : A.I.R. 1937 Mad. 182 : I.L.R. (1937) Mad. 299, where a suit is brought after the obliigor's death against his heirs, the Court will in weighing evidence, take into account the fact that the defendant was not himself a party to the transaction and the plaintiff is in that way placed in a position of advantage. The plaintiff in such a case, has therefore to satisfy the conscience of the Court and establish the truth of the promissory note in unmistakable terms. It is the case of the plaintiff as set out in his plaint that late Selvaraj had overdrawn large sums of money to the tune of Rs. 25,000 from Interpack Industries of which he was a partner and as the other partners pressed for the money, the said Selvaraj who was employed under the plaintiff borrowed these two sums, namely, Rs. 5,000 and Rs. 20,000 under Exs. A1 and A2 promissory notes on 30.5.1972. It is pertinent to point out here that the Interpack Industries is only a sister concern of the plaintiff who has been carrying on as a proprietor of Lakshmi Paper Industries. The partners of Inter-pack Industries are the said Selvaraj, plaintiff's co-brother, father-in-law and his son and the fact that this is the sister concern of Lakshmi Paper Industries of which the plaintiff is the proprietor is admitted by P.W. 4, while the case in the plaint is at in order to reimburse Interpack Industries for the monies overdrawn the said Selvaraj borrowed from the plaintiff Rs. 25,000 under two promissory notes on 30.5.1972. But in the notice issued under Ex. A3 dated 17.4.1975 the plaintiff has stated that Selvaraj borrowed these amounts from him for his family necessity and for the purpose of constructing the house near L.I.C. colony. To this notice under Ex. A3, the defendants 2 to 4 issued reply under Ex. A4. They pointed out that the house near the L.I.C. colony belongs to the second defendant and the construction was over long before 30.5.1972 when late Selvaraj is said to have borrowed Rs. 25,000 from the plaintiff and hence there was absolutely no necessity for the said Selvaraj to borrow any money from the plaintiff for constructing any house. In his rejoinder, the plaintiff has come forward with the case that late Selvaraj had already borrowed large sums of money from Interpack Industries of which he was a partner for the purpose of constructing a house and in order to discharge those debts, he borrowed Rs. 25,000 from the plaintiff on 30.5.1972, under Exs. A1 and A2. This case in the rejoinder, is clearly an afterthought intended to meet the contention of the defendants that the house had already been put up and there was no necessity to borrow on 30.5.1973. A still more different story is put forward by the plaintiff in his evidence as P.W. 2. In his evidence he would say that late Selvaraj in addition to the borrowings from Interpack Industries, borrowed this amount of Rs. 25,000 from him for the additional expenses for the building. We have thus got three versions of the purpose for which the borrowings are said to have been made by late Selvaraj. These irreconcilable inconsistencies in the case of the plaintiff cast a serious doubt On this claim.
9. The plaintiff would place great reliance on the account books of Interpack Industries and the account books of his concern Lakshmi Paper Industries to prove that late Selvaraj had overdrawn a sum of Rs. 25,000 on 30.5.1972 under Exs. A1 and A2. The ledgers and day books for the relevant period have been produced. But as admitted in his evidence by P.W. 4 in his evidence who claims to be full-time accountant of the plaintiff concern and part-time accountant of Interpack Industries there are several corrections in these accounts. In Ex. B1 the year is corrected from 1972 to 1973. The date 30.5.1971 is corrected into 30.5.1972. Similarly, in Exs. B2, B3 and B4, there are corrections in the years. In Exs.A25, A26 and A27, the years are corrected. It is also significant that these account books do not bear the seal of the Income-tax Department though P.W. 4 would contend that these books had been sent to the Income-tax office during assessment. It is also admitted by P.W. 4 that along with the returns, they used to submit the list of creditors and debtors. No such list is produced in the Court and if such a list is produced, it would clearly show that long before the institution of the suit, late Selvaraj was the debtor to the plaintiff. Late Selvaraj is said to have overdrawn amounts from Interpack Industries under Exs. A12 to A17 vouchers. It is averred by the plaintiff in his rejoinder under Ex. A5 that this debit vouchers have been written by late Selvaraj himself. But this case has been given, a go-by in the evidence. P.W. 4 would say that it was he who wrote these vouchers. P.W. 4 would also admit in his evidence that all the relevant entries in the day book and the ledgers of Inter-pack Industries have been made by one Narayana Iyer. But the said Narayana Iyer had not been examined. As pointed out by this Court in V.K. Abraham v. N.K. Abraham , the account books are not by themselves sufficient to charge any person with liability. The plaintiff has to show by some independent evidence that the entries in the books represented real and honest transactions and that the moneys paid or the transactions took place, in accordance with those entries. The proper person, therefore to prove the entries in the account books is the accountant of Interpack Industries from which late Selvaraj is said to have overdrawn large sums of monies. But the said Narayana Iyer has not been examined and no explanation has been put forward for his non-examination. In the circumstances, I am unable to place much reliance on the accounts to hold that late Selvaraj had overdrawn amounts from Interpack Industries or that he borrowed from the plaintiff Rs. 25,000 under Exs. A1 and A2 to repay the overdrawn advances.
10. The most important aspect to be considered is with reference to the fact that on 30.5.1972 when the plaintiff is said to have advanced Rs. 25,000 under Exs. A1 and A2 to late Selvaraj, he had no money on hand. It is admitted by P.W. 4 his accountant that a sum of Rs. 25,000 was withdrawn from the Bank on that date and it was the said amount that was advanced to late Selvaraj. No doubt there are entries for such withdrawals in the plaintiff's account. But in spite of the definite stand taken by the defendants that there was no such borrowings, the plaintiff has not chosen to produce his pass book which would be the best evidence to show on 30.5.1972, a sum of Rs. 25,000 had been withdrawn from the Bank and it was this amount that was advanced to late Selvaraj. Similarly, it is the case of the plaintiff that out of the sum of Rs. 25,000 a sum of Rs. 20,000 was paid by late Selvaraj to Interpack Industries on that day and that this sum of Rs. 25,000 was immediately remitted into the State Bank of India. Here again, the pass book of Interpack Industries has not been produced to show that a sum of Rs. 25,000 was remitted to the Bank on that date. Non-production of the pass book of the plaintiff and the pass book of Interpack Industries throws a serious doubt on the relevant entries in the account books of the plaintiff and Interpack Industries. As already pointed out where the plaintiff sues legal representatives of the deceased promissor, he has to produce the best evidence available. The non-product ion of the pass book raises a presumption that if they are produced, they would be unfavourable to the plaintiff (vide Section 114(g) of the Indian Evidence Act). The Court is therefore entitled to draw the inference that these pass books had been deliberately kept, out of Court as the production would falsify the entries in the account books of the plaintiff and interpack Industries.
11. Each of Exs. A1 and A2 promissory notes are affixed with four 10p. revenue stamps. A look at the stamps would show that the first three stamps are quite different from the last one which are refugee relief stamps. The way in which these last stamps had been affixed shows that these must have been affixed subsequently. This again raises a serious suspicion as to the genuineness of Exs. A1 and A2.
12. Now, to the oral evidence, the plaintiff, in addition to himself as P.W. 2, has examined three witnesses to prove the execution of the suit promissory notes and the passing of consideration therefor. P.W. 1 is a clerk in the plaintiff-company and his evidence is that he saw the execution of the suit promissory note by the late Selvaraj but he was not present when the money was actually paid. This is rather strange. For, it is not the case of the plaintiff that the execution of the promissory notes and the payment of moneys therefor were at different times. The testimony of P.W. 1 is, therefore, of no use. P.Ws. 3 and 4 are attestors to the suit promissory note. They are also employees of the plaintiff. The evidence of P.Ws. 2, 3 and 4 is that at about 10 a.m. in the morning the late Selvaraj borrowed Rs. 20,000 and executed Ex. AI promissory note and later in the day at about 3.30 p.m. the defendant again came and borrowed another sum of Rs. 5,000 and executed Ex. A2 promissory note. There is no explanation as to why the late Selvaraj borrowed these two sums of money' twice the same day. It is admitted by P.W. 4, who is the accountant of the plaintiff-firm and part-time accountant of Interpack Industries that the accounts of Interpack Industries had already been settled and that a sum of Rs. 21,000 was found overdrawn by late Selvaraj. If so, Selvaraj could have borrowed Rs. 21,000 in the morning itself and there is also necessity for lending a sum of Rs. 25,000 when his over drawings from Interpack Industries was only Rs. 21,000, As already pointed out, it is admitted by P.W. 4 that no money was on hand with the plaintiff on 30.5.1972 when Exs. A1 and A2 were executed and it is only after drawing Rs. 25,000 from the Bank, the amounts were lent to late Selvaraj. Apart from the fact that the passbook for drawing this amount has not been produced, it is alto doubtful whether even at 10 a.m. in the morning the money could have been withdrawn from the bank and kept ready to advance Rs. 20,000 to late Selvaraj at 10 a.m. The testimony of P.Ws. 2 to 4 does not therefore, (sic) confidence and the learned Subordinate Judge who has seen them in the witness box, has been unable to accept the testimony. I find no ground to differ from him.
13. For the foregoing reasons, I hold that the plaintiff has failed to establish satisfactorily that Exs. A1 and A2 promissory notes were duly executed by late Selvaraj and that they were supported by consideration. This learned Subordinate Judge has come to the correct conclusion that the suit promissory notes are not true and are not valid in law. This point is found against the appellant.
14. In the result, the appeals fails and is dismissed with costs.